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Spectrum Brands Continues to Rally Higher

Zacks Equity Research

Shares of Spectrum Brands Holdings Inc. (SPB) continue to rally up the index over the past year amassing an annual return of 42.6% and a year-to-date return of 14.6%. Moreover, the stock hit a new yearly high of $81.00 on Apr 2, 2014, before closing a notch lower at $80.91.

This global and diversified consumer products company has been riding on its innovative designs for products, strong first-quarter fiscal 2014 performance, focus on rewarding shareholders and efforts to drive long-term growth. Moreover, the company’s average analyst price target of $81.33 stands marginally below its last traded price, reflecting the potential for a further rally in the stock. Average volume of shares traded over the last 3 months stands at approximately 234.4K.

Investors applaud the company’s stringent focus on bringing new and innovative products to consumers on a regular basis. Early last month, the company unveiled products with the latest technologies and key innovations from its Black + Decker, George Foreman and Remington brands at the 2014 International Home + Housewares Show. Later in the month, the company’s Baldwin brand launched the new and contemporary Santa Monica collection at the 13th Annual Architectural Digest Home Design Show.

Moreover, Spectrum Brands’ emphasis on expansions and acquisitions in order to drive long-term growth has always appealed to investors. Recently, the company ventured into a new product line with the acquisition of leading animal repellents company The Liquid Fence Company Inc., which will form a part of the company’s St. Louis-based United Industries Home and Garden division.

Investor optimism also surrounds the company’s first-quarter results, reported in January, wherein earnings per share surged 39.7% year over year and net sales recorded 26.5% growth. On an average, the stock has delivered a positive earnings surprise of roughly 9.3% over the last 9 quarters. The company also has long-term EPS growth of 16%, greater than the peer group growth rate of 10.8%.

This Zacks Rank #3 (Hold) stock also remains focused on boosting shareholders’ value, as evident from its recent announcement of a 20% hike in quarterly dividend to 30 cents a share. This further underscores the company’s financial position.

Other than Spectrum Brands, Avis Budget Group Inc. (CAR), Foot Locker Inc. (FL) and Macy’s Inc. (M) rallied to the 52-high mark of $51.47, $48.35 and $60.88 respectively, on Apr 2, 2014.

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